NSAC's Blog

Federal Low Interest Financing Program Expanded to Help Farmers Reach Local Food Markets

Washington, DC, April 29, 2016 – Small and mid-scale family farms operating in burgeoning local and regional food markets received some welcome news from the U.S. Department of Agriculture (USDA) today. USDA’s Farm Service Agency (FSA) announced that their Farm Storage Facility Loan (FSFL) program can now help finance portable storage structures, portable equipment, and storage and handling trucks in addition to continuing its longstanding capacity to finance stationary crop and cold storage on-farm facilities.

This expansion of the low-interest loan program will help FSA service fruit and vegetable farmers and others who need to get crops safely and efficiently to local farmers markets, schools, restaurants, food hubs, and stores.

“We encourage farmers, especially those serving growing local and regional food markets, to take a close look at the new options provided by the Farm Storage Facility Loan Program,” said Ferd Hoefner, Policy Director at the National Sustainable Agriculture Coalition (NSAC). “This is not your father’s grain bin financing program, though grain bins are certainly still eligible. But the program now has options to finance produce packing and washing sheds and mobile equipment that very much puts the program on the map for farms that have never had reason to look at the program and its low-interest financing heretofore.”

In addition to the new eligibility for mobile equipment, the new rule also provides for an easier loan application process with less paperwork for small loans of under $50,000. FSA is still able to make loans of up to $500,000 under the program, but the new “microloan” option might be attractive to small and beginning farmers who may be looking for a smaller loan with less red tape involved. The microloan option will require only a 5 percent down payment versus the 15 percent required for larger loans.

In the past two years, FSA has expanded the program to make packing sheds eligible. This is where fruit and vegetables washed, sorted, graded, labeled, boxed up, and stored before it heads to market. FSA also expanded program eligibility to unprocessed meat and poultry, eggs, milk, cheese, butter, yogurt, flowers, hops, rye, and aquaculture, products previously not included in the FSFL program. The agency also started to coordinate the storage loan program with other federal farm credit programs, so farmers can put together loan packages more easily to cover a wider range of financing needs.

Those earlier changes did not require a change in federal regulations, but the change announced today to cover mobile structure, equipment, and vehicles and to create a “microloan” option needed to go through the rulemaking process, and hence took a bit longer to bring online.

“We applaud FSA for this additional expansion of the program to cover the needs of additional farmers and to help make the program more relevant to local and regional food markets,” said Juli Obudzinski, Senior Policy Specialist with NSAC. “We strongly encouraged USDA to make these changes to serve the needs of a more diverse range of farm businesses, and we are very pleased with the results. Coupled with the changes from the past two years, today’s announced expansion of the program will help farmers keep food safe, facilitate new markets, and better serve the expanding customer base for healthy, local and regional food.”

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The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities.